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Degree of Difficulty

Markets face a difficult task, today: keep the rally alive while interest rates and inflation are making investors very, very nervous.

The interest rate breakout continues, with TNX reaching 29.75 moments ago. It was enough to get DXY back up to its neckline again — the 5th backtest so far. Anything higher, though, would be a problem. And, it was almost enough to get ZN to our early downside target. The question over the past several months was how to get ZN and DXY down to support — whether in one fell swoop or drawn out for months — without equities falling apart.

With USDJPY closing in on overhead resistance and EURUSD finding support at its triangle bottom, it’s going to be tricky for stocks to hold these levels, especially if CL and RB take a dive.

AMZN is showing negative divergence with a bearish falling channel in its RSI.And, AAPL is very likely to drop through its 200SMA.Will the bulls pin it on FAANG? Probably. FB and NFLX also look vulnerable, here — lending credence to our COMP theory.